Carl Sprinkle only went to the Harley-Davidson dealer for new foot pegs. His motorcycle was 16 years old. Then he saw it. A limited-edition three-wheeled Street Glide, black paint, three ghostly eagles on the tank. Price: $46,000. "There was no way I wasn't going to have that motorcycle," he said. He's 68, a retired union pipe fitter in Indiana. He sold his camper and traded in another Harley to bring it home.
Sprinkle's purchase explains a puzzle. High interest rates, high gas prices and a nervous economy have hurt sales of leisure products from RVs to boats. Not Harley-Davidson (HOG). In North America, its main market, retail sales have risen year over year in each of the last four quarters. The company is on track for its first full-year increase since 2021. Global sales are up 4% this year. The stock is up more than 60% since January. A Citi analyst who had doubted the company for years upgraded it to buy after watching the monthly numbers stack up.
Cheaper bikes, lower rates, older riders
The chief executive says new models unleashed pent-up demand. The three-wheeled trikes aimed at older riders got more horsepower and softer suspension. Two midtier bikes, the Super Glide and the Deadwood, arrived too. A Pittsburgh-area rider, 45, traded in a Low Rider for a Super Glide at about $16,000. He called it a good value by Harley standards. Dealers say rebates and company-offered rates as low as 1.99% bring people in the door. One dealer put it plainly. People are looking for camaraderie and something to do. "They're looking for their next sense of joy," he said.
The numbers are still small by history. Harley expects to sell 135,500 to 139,000 motorcycles worldwide this year. Last year it sold 132,535. In its peak year, 2006, it sold 344,000. Europe is down 6% this year. Next year brings a Sprint 440 for under $6,000 and a revived Sportster 883 at about $10,000. The analyst says the old worry about an aging rider base hasn't gone away.
Our read
This is a Cash Flow story, module M5, and we're on Carl's side. A retirement that forbids joy isn't a plan anyone keeps. The question isn't whether to buy the trike. It's which bucket pays for it. Sprinkle did it the healthy way. He sold a camper he wasn't using and traded in a bike. The new toy came out of old toys, not out of the money that pays the light bill for the next twenty years.
Here's the check for your own plan. Write down the one big purchase you've been circling, the boat, the trip, the kitchen. Then write down where the money would come from. If the answer is the taxable account or an old asset you'd sell anyway, fine. If the answer is a 1.99% loan, read the term and the total cost, and know a rate that low usually means the discount is somewhere else in the price. If the answer is your IRA, stop. A withdrawal to buy a toy is taxed as income and can push you into a higher bracket for the year. In our model portfolios we hold no Harley stock, and a 60% run in a year is a reason for caution, not a reason to chase. Bring the purchase you're circling to a fifteen-minute call. We'll find the bucket.